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www.google.com/think/insights Understanding Mass /Skincare Purchasers

Google Compete Custom Beauty Research Study U.S., 2009 Study Methodology

Survey Analysis • 4,244 consumers in December 2008 who had recently purchased beauty products & 1,448 consumers in January 2009 who had recently visited a beauty-related website

Definitions for Survey Data (which were self reported): • To obtain a data cut across the beauty sub-verticals, the surveys asked respondents about their most recent purchase and whether or not it was: – Fragrance – Personal care (soap, body wash, razors, deodorant) – Cosmetics/skincare • If respondent chose cosmetics/skincare, they were then to check off what brand they purchased among a set of brands here which lead to the classification of prestige vs. mass cosmetics/skincare

– Avon – Lancome – Prestige – – Mass – – – M.A.C cosmetics/skincare – L'Oreal – – Chanel – – Bath & Body Works – – CoverGirl – – Estee Lauder – Olay – L'Occitane – Bare Escentuals – Dove – Dior – – Color – Other* – – Sally Hansen – Benefit – – Prescriptives – Clearasil – Other* *Note: If respondent chose “other”, Compete manually classified into prestige vs. mass based on premise of being able to be found in a drug or mass store. Google Confidential and Proprietary 2 Most in-store mass cosmetics/skincare sales occur in discount retailer stores or pharmacies

Place of purchase for in-store mass cosmetics/skincare Among in-store mass cosmetic/skincare purchasers

Specialty Store 3% Grocery Store 9%

Drugstore/Pharmacy 32% Discount Retailer 54%

Department Store 2%

Q5: You mentioned that you bought your most recent Cosmetics/Skin Care purchase at a store. From which of the following kinds of stores did you make this purchase? Base: In-store mass cosmetics/skincare purchasers, n=960 Source: Google CPG June 2009 Study: Compete Beauty Products and cosmetics/skincare Survey Questionnaire Google Confidential and Proprietary 3 Mass cosmetics/skincare purchasers who buy in-store do so in part because they are already in the store and they want to get the items immediately Reasons for purchasing mass cosmetics/skincare offline Among in-store mass cosmetics/skincare purchasers

Already in store 50%

Wanted the item immediately 45%

Cost of shipping 28%

Better price 25%

Special deal 22%

Compare products in person 15%

Try product before purchase 6%

Privacy concerns 4%

Free sample 2%

Talk to salesperson 2%

Not available online 2%

Free gift with purchase 1%

Q12B: You mentioned earlier that you made your most recent Cosmetics/Skin Care purchase at a store. Why did you buy at a store rather than online? Base: In-store mass cosmetics/skincare purchasers, n=960 Source: Google CPG June 2009 Study: Compete Beauty Products and cosmetics/skincare Survey Questionnaire Google Confidential and Proprietary 4 A small percentage of consumers purchase mass cosmetics/skincare online

Propensity to purchase beauty products online

34%

23%

8% 3%

Fragrances Purchasers Personal Care Purchasers Prestige Cosmetics/Skincare Mass Cosmetics/Skincare Purchasers Purchasers

Q4: Where did you buy your most recent {Insert “Cosmetics/Skin Care”, “Fragrance” or “Personal Care”} purchase? Base: Fragrance purchasers, n=1050; Personal care purchasers, n=1061; Prestige cosmetics/skincare /skincare purchasers, n=1060; Mass cosmetics/skincare purchasers, n=1073 Source: Google CPG June 2009 Study: Compete Beauty Products and cosmetics/skincare Survey Questionnaire

Google Confidential and Proprietary 5 Online mass cosmetics/skincare purchasers prefer the ease and convenience of ordering online and home delivery

Reasons for purchasing mass cosmetics/skincare online Among online mass cosmetics/skincare purchasers

Easier to shop from home or office 55% Direct shipping 51% Faster shopping experience 33% Better price 35% Online promotion 27% Earn points for a loyalty program 25% Free online shipping 23% Better selection 23% More information available online 22% Easier to compare prices 16% Didn’t know where to buy it offline 15% Don’t have to interact with salespeople 14% Free sample 8% Q12A: You mentioned earlier that you made your most recent Cosmetics/Skin Gas prices are too high 3% Care purchase online. Why did you buy online rather than at a store? Base: Online mass cosmetics/skincare purchasers, n=88 Ship gift directly to recipient 2% Source: Google CPG June 2009 Study: Compete Beauty Products and cosmetics/skincare Survey Questionnaire

Google Confidential and Proprietary 6 Mass cosmetics/skincare shoppers are more likely than other beauty shoppers to try a new product from a trusted brand

Type of product purchased most recently

65% 61%

31% 23%

12% 8%

Previously Purchased Product** Previously Purchased Brand** New Product and Brand**

Mass Cosmetics/Skincare Purchasers All Beauty Purchasers

** indicates significance at the 95% level

Q10: Which statement best describes your most recent Cosmetics/Skin Care purchase? Base: Mass cosmetics/skincare purchasers, N=1073; All beauty purchasers, n=4244 Source: Google CPG June 2009 Study: Compete Beauty Products and cosmetics/skincare Survey Questionnaire Google Confidential and Proprietary 7 84% of purchasers who conduct research do not know exactly which mass cosmetics/skincare they intend to buy when they start shopping Mindset about most recent mass cosmetics/skincare purchase Among mass cosmetics/skincare purchasers who conducted research prior to most recent purchase

40%

33%

16%

10%

Had no idea Had some idea Had a pretty good idea Knew the exact item

Q9: Which statement best describes your mindset about your most recent Cosmetics/Skin Care purchase when you first started looking at sources? Base: Mass cosmetics/skincare purchasers who conducted research prior to purchase, n=442 (41% of cosmetics/skincare purchasers) Source: Google CPG June 2009 Study: Compete Beauty Products and cosmetics/skincare Survey Questionnaire

Google Confidential and Proprietary 8 85% of mass cosmetics/skincare purchasers buy within a week of starting their product research Time between initial research and purchase for most recent purchase Among mass cosmetics/skincare purchasers who conducted research prior to most recent purchase

37% 34%

14% 10% 5%

Same Day Following Day Within 1 Week Within 2 Weeks More than 2 Weeks

Q11: Thinking about your most recent Cosmetics/Skin Care purchase, approximately how soon after you started looking for information about what items and brands to buy did you make your purchase? Base: Mass cosmetics/skincare purchasers who conducted research prior to purchase, n=442 (41% of mass cosmetics/skincare purchasers) Source: Google CPG June 2009 Study: Compete Beauty Products and cosmetics/skincare Survey Questionnaire Google Confidential and Proprietary 9 Mass cosmetics/skincare shoppers rely on product information within retail stores

Resources used by mass cosmetics/skincare purchasers Mass cosmetics/skincare purchasers who used a resource to shop for their most recent beauty products

44% Retail store** 38% 20% Friends or family 21% 11% Retail websites 12% 11% Fashion/Beauty magazine** 9% 11% Beauty brand websites 10% 5% Search engine 5% Mass Cosmetics/Skincare Shoppers 5% Store Beautician** 8% All Beauty Shoppers 5% Email newsletter 5% 4% Online beauty magazine 3% 4% Consumer generated online reviews 3% 2% Traveling beauty representative 3% 1% Video websites 1% 0% Social network websites** 1% ** indicates significance at the 95% level Q2: Thinking about the {Insert “Cosmetics/Skin Care”, “Fragrance” or “Personal Care”} products you purchased in the past three months, what sources did you use to find information about what products and brands to buy? Base: Mass cosmetics/skincare purchasers, n=1073; Beauty purchasers, n=4244 Source: Google CPG June 2009 Study: Compete Beauty Products and cosmetics/skincare Survey Questionnaire Google Confidential and Proprietary 10 Mass cosmetics/skincare purchasers depend on friends and family to find out about new brands

Timing of resources used by mass cosmetics/skincare purchasers Among mass cosmetics/skincare purchasers who used a resource to shop for their most recent cosmetic/skincare product

Initial product General product Specific product Resource Final decision exposure research comparison

Beauty Brand Websites* 29% 55% 39% 13%

Beauty Magazine* 23% 74% 13% 13%

Friends or Family 32% 49% 19% 19%

Retail Store 12% 48% 36% 29%

Retail Websites* 11% 59% 30% 30%

*small sample Q8. Thinking about your most recent Cosmetics/Skin Care purchase, when did you use each of the sources during your decision about what to buy? Base: Mass cosmetics/skincare purchasers who used each resource to shop for their most recent mass cosmetic/skincare products, n= variable (38-214) Source: Google CPG June 2009 Study: Compete Beauty Products and cosmetics/skincare Survey Questionnaire

Google Confidential and Proprietary 11 Friends and family are most influential to mass cosmetics/skincare purchasers

Influence of resources used by mass cosmetics/skincare shoppers Mass cosmetics/skincare purchasers stating “Often” or “Frequently”

Friends or Family 81%

Retail Websites* 73%

Beauty Magazine* 72%

Beauty Brand Websites* 66%

Retail Store 50%

*small sample Q7: Thinking about your most recent Cosmetics/Skin Care purchase, how influential was each of the sources you used in making your final decision about what to buy? (5-point scale) Base : Mass cosmetics/skincare purchasers who used each resource to shop for their most recent mass cosmetic/skincare products, n= variable (38-214) Source: Google CPG June 2009 Study: Compete Beauty Products and cosmetics/skincare Survey Questionnaire Google Confidential and Proprietary 12 Online mass cosmetics/skincare shoppers rely on search engines to help guide their purchase process

Tendency to perform specific actions when shopping online for mass cosmetics/skincare Mass cosmetics/skincare purchasers stating “Often” or “Frequently”

bc 50% Compare product price prior to purchase 40% 39% Find a coupon 38% BC 38% Use a search engine to find a specific product 21% 35% Compare prices of two similar products 35% BC 35% Read consumer reviews 20% Bc 34% Find place to purchase product 23% BC 31% Use a search engine to find an online retailer 17% 26% Compare the merits of two similar products 27% Bc 26% Discover new products that I end up buying 16% 22% Obtain free sample 26% Lowercase indicates 90% significant level Uppercase indicates 95% significant level

Q14: Please indicate how often you do any of the following activities when you go online to look for information about what Cosmetics/Skin Care products and brands to buy? (5-point scale) Base: Online mass cosmetics/skincare purchasers, n=88; Offline mass cosmetics/skincare purchasers, n=985; Mass cosmetics/skincare purchasers, n=1073 Google Confidential and Proprietary 13 Source: Google CPG June 2009 Study: Compete Beauty Products and cosmetics/skincare Survey Questionnaire Consumer generated reviews are more influential to online purchasers than offline purchasers

Influence of sources on purchase decision Mass cosmetics/skincare purchasers stating “Extremely Influential” or “Very Influential”

82% Past purchases of the product or brand 86% BC 58% Price 71% BC 38% The brand name 45% BC 35% Product reviews from other consumers 22% 28% Friends and family 32% 11% Fashion/Beauty Magazines 10% 11% Store personnel 8% 6% Blogs 3% 6% Celebrity Endosements 2%

Uppercase indicates 95% significant level Q18. When considering a Cosmetics/Skin Care purchase, how influential are the following on your decision? (5-point scale) Base: Online mass cosmetics/skincare purchasers, n=88; Offline mass cosmetics/skincare purchasers, n=985; Mass cosmetics/skincare /skincare purchasers, n=1073 Google Confidential and Proprietary 14 Source: Google CPG June 2009 Study: Compete Beauty Products and cosmetics/skincare Survey Questionnaire Why should mass cosmetics/skincare marketers care about the web?

Because online mass cosmetics/skincare purchasers are … Younger and more affluent • 40% of online purchasers vs. 33% of offline purchasers are between the ages of 25-44 A • 56% of online purchasers vs. 40% of offline purchasers have a household income above $60K B**

Influencers • Online shoppers are 25% more likely to tell others about their favorite brands and products compared to offline fragrance shoppers C** • Online shoppers are 68% more likely to be viewed as knowledge about beauty products compared to offline fragrance shoppers C** A: D2: Please select your age. ** indicates significance at the 95% level B: D3: What is your annual household income? C: Q19: Below is a list of statements related to Cosmetics/Skin Care . How much do you agree or disagree that each of the following statements describe you, using the 5-point scale below? All of the Above: Base : Online mass cosmetics/skincare skincare purchasers, n=88; Offline mass cosmetics/skincare purchasers, n=985 Source: Google CPG June 2009 Study: Compete Beauty Products and cosmetics/skincare Survey QuestionnaireGoogle Confidential and Proprietary 15 Why should mass cosmetics/skincare marketers care about the web?

Because online mass cosmetics/skincare purchasers are …

Bigger spenders • 23% of online shoppers vs. 7% of offline shoppers spend more than $50/month on cosmetics/skincare A ** • 53% of online shoppers vs. 2% of offline shoppers spend more than half of their cosmetics/skincare budget online B**

More engaged consumers • 34% of online shoppers vs. 12% of offline shoppers use the web to research cosmetics/skincare at least once a month C**

A: Q16: During a typical month, how much would you estimate you spend on Cosmetics/Skin Care products? B: Q17: Considering all the money you spend on Cosmetics/Skin Care products in a typical month, approximately what percentage of it is spent on purchases made online? ** indicates significance at the 95% level C: Q13: You mentioned earlier that you go online to find information about what Cosmetics/Skin Care and brands to buy. Approximately how often do you go online to look for information on Fragrance? All of the Above: Base : Online mass cosmetics/skincare /skincare purchasers, n=88; Offline mass cosmetics/skincare purchasers, n=985 Source: Google CPG June 2009 Study: Compete Beauty Products and cosmetics/skincare Survey QuestionnaireGoogle Confidential and Proprietary 16 Like what you learned? Find more studies and data at

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